Stanley Sporkin has been retained
by the Office of Federal Housing Enterprise Oversight (OFHEO) to assist
in its duties overseeing Fannie Mae -- one of the largest issuers of mortgage
backed securities and related derivatives in the world.

Why should we care? All
Americans are impacted by the health and well being of Fannie Mae's operation
- as homeowner, as investor and as taxpayers.

The entire US mortgage market
is currently dependent on several private corporations that enjoy special
governmental credit support (called Government Sponsored Enterprises
or GSEs). Because of their size, the value of our homes may decrease
if a GSE becomes troubled.

Many pension funds, mutual
funds and money market funds include Fannie Mae securities. Hence, the
retirement savings of many Americans and global citizens, as well as
the resources of global financial institutions, are now vested in Fannie
Mae's well being.

If government resources
are called upon to forestall or support Fannie Mae in a bankruptcy or
reorganization, our tax dollars and taxpayer-backed government credit
could be diverted to fund Fannie Mae's liabilities and to subsidize
the US mortgage markets.

If one GSE is troubled,
it could impact the viability and health of the others, including Freddie
Mac and the Federal Home Loan Bank System, as well as Ginnie Mae, a
governmental corporation at the Department of Housing and Urban Development
(HUD).

The following questions, organized
around Judge Sporkin's historical areas of responsibility, are intended
to illuminate the background and experience that Judge Sporkin brings
to the task of assisting the Bush Administration in the oversight and
regulation of Fannie Mae.

This information should be
useful to investors in US mortgage securities who are assessing credit
ratings and pricings of Fannie Mae, Freddie Mac, FHFB, Ginnie Mae and
other related mortgage and homebuilding stocks, bonds and derivatives
or the investment, mutual funds, pension funds and money market funds
that hold them.

These questions have been sent
to Judge Sporkin. We will post
any response we receive.

Regulating Fannie Mae

FannieMae

Question
#1: Are you under
investigation by the Department of Justice?

On November 1, 2003, the Washington Post reported that the Department
of Justice's Office of Professional Responsibility had opened an
investigation into your alleged misconduct along with a group of
attorneys at the Central Intelligence Agency (CIA)
and Department of Justice (DOJ) involved in the prosecution of a
former CIA officer, Ed Wilson. This investigation was inspired by
a ruling in the Wilson case in which the Judge ruled that government
lawyers, including you, "knowingly used false evidence"
in Mr. Wilson's trial and appeal.

Question
#2: What are your
potential conflicts of interest?

Are there any conflicts of interest created by DOJ's investigation
into your alleged misconduct in connection with the Wilson case,
and your role on behalf of the Administration in overseeing Fannie
Mae, given the DOJ and Securities & Exchange Commission (SEC)
investigations of Fannie Mae?

You are a partner of Weil, Gotshal & Manges,
a law firm noted for its expertise in corporate bankruptcy. Given
Weil's corporate client base –including as lead bankruptcy counsel for Enron –what are the potential conflicts of interest involved in
your role helping to regulate Fannie Mae,
a large private corporation? What are the potential profits of your
firm and its network of serving as a lead counsel in a Fannie Mae
bankruptcy?

Question
#3: Does the math
of the mortgage bubble work?

How many homes are there in America? What is their appraised value?
What is the number of outstanding mortgages in America and what
is their outstanding principal value? What is the basis of allegations
that there are more mortgages outstanding in the mortgage markets
than there are homes?

What is the total value of outstanding mortgage backed securities
and tax-exempt municipal
housing bonds related to American homes and mortgages? What
is the basis of the allegations that outstanding securities
are greater in value by a significant amount than the US residential
housing stock that secures them?

What is the total principal amount of outstanding derivatives related
to these mortgages and
homes ? Does the algebra work here or something fraudulent
going on?

Does increasingly centralized control of the appraisal industry
have something to do with current valuations? Is there merit to
the allegations that the Bush Administration and Judge Sporkin are
tightening oversight of Fannie to avoid
Congressional investigations that
might unravel the continuing financing and refinancing of
sizeable mortgage securities frauds from the 1980s and 1990s?

What will happen to the value of American homes and Fannie Mae,
Freddie Mac, Federal Home
Loan Bank System and Ginnie Mae securities as a significant
number of American jobs are transferred abroad with the help and
support of U. S. government policy? What could a rise in interest
rates to do these various values? What would happen if the total
equity value of America's home net of outstanding mortgage finance
turned negative?

How can the US mortgage rate surpass
the homeownership rate?(graph courtesy of global economy expert Chris Sanders
from his article "Where is the Collateral?")

Question
#4: Why are Fannie
Mae and HUD still using the same auditor?

If the
Bush Administration and the Office of Federal Housing Oversight
believe that Fannie Mae's books have not been properly maintained,
why do the Department of Housing and Urban Development (HUD) and
other agencies of the US government use the same firm, KPMG, as
an auditor and contractor?

Question
#5: Is partisan
politics involved in the regulation of Fannie Mae?

Fannie Mae has traditionally been viewed as a Democratic stronghold.
The current CEO, Franklin Raines was the head of Office of Management
and Budget (OMB) during the Clinton Administration. The prior CEO,
Jim Johnson was equally involved in Democratic administrations and
campaigns.

"As Washington donnybrooks go, it doesn't
get any bigger than this.
The company, housing lender Fannie Mae, is the biggest in the
region, with nearly $1 trillion in assets and gobs of outstanding
debt held by pension funds and banks and even foreign central
banks, all of which crave its implicit U.S. government guarantee.
Its executive suite and board of directors are packed with the
politically well connected, while its lobbying muscle is so formidable
it has been able to fend off a concerted effort to rein in its
growth and profitability by the White House, the Federal Reserve
and the Republican leadership on Capitol Hill.

But now Fannie is reeling. A stinging report
issued by its once-obscure regulator, the Office of Federal Housing
Enterprise Oversight, alleged that top Fannie executives manipulated
accounts to inflate and smooth earnings in an effort to boost
the stock price and earn big bonuses. The regulator accuses the
company of having lax internal controls and insufficient capital
to back up its massive financial risk-taking, while ignoring the
warning of a whistle-blowing employee no longer on the payroll.
The report, prepared by Deloitte & Touche and Stanley Sporkin,
a longtime enforcement director at the Securities and Exchange
Commission, has now prompted criminal and civil probes by the
Justice Department and the SEC."

Do recent actions by the Bush Administration regarding Fannie Mae
relate to the current Presidential election and the role of the
mortgage and homebuilding industry to campaign fund raising and
manipulation of the mortgage markets? When viewed through the lens
of "economic
warfare,"
does the recent agreement negotiated between OFHEO and Fannie Mae
give Republican interests extraordinary powers to micromanage Fannie
Mae and members of the mortgage banking industry for political purposes?

As US Federal District Judge - District of Columbia

Question
#1: Why did you
lead the persecution of Hamilton Securities?

You were for many years the
presiding judge on the Ervin
Qui Tam case – a case brought by Ervin, a Ginnie
Mae contractor, against Hamilton Securities, the leading firm
in Washington in helping to reengineer defaulted mortgages
– having designed and led HUD's successful $10 billion
mortgage auction program. Why did you extend the seal almost
four years, without evidence of any wrong doing, and despite
an FBI investigation report and HUD IG audit report finding
that there was no evidence of wrong doing? Why did you permit
the government to argue contradictory positions: arguing one
position in the Bivens case brought by Ervin in open court;
and a contradictory position in the Qui Tam case behind the
seal? Why did you coach Ervin's attorneys from the bench behind
the protection of the seal? Why are critical transcripts of
the sealed hearings missing from the records?

The
only
mortgage-backed
security that
enjoys the full
faith and credit of the United States
Government

Question
#2: What role
have you played in black budget market manipulation and $59 billion
missing from HUD?

As
a federal judge overseeing the seizure of the Hamilton Securities
computer files and software tools, including "Community Wizard"
and extending a four year seal on a qui tam lawsuit targeting, you
have played an instrumental role in destroying the regulatory financial
controls in the 1990's that could have prevented much of the US
mortgage market bubble and manipulations. How do you reconcile your
role in creating the US mortgage bubble with your role in helping
to bring "financial
responsibility" to Fannie Mae?

The persecution of Hamilton Securities and a series of HUD government
officials caused a significant drain in critical leadership at HUD.
Subsequently, HUD was not able to produce audited financial statements
and reported significant undocumentable adjustments, including $17
billion in 1998 and $59 billion in 1999, along with significant
increases in mortgage insurance. How would you describe your judicial
role in contributing to this explosion of federal mortgage liability
and implosion of federal mortgage financial and regulatory controls?
Franklin Raines, the CEO of Fannie Mae, was the head of the Office
of Management and Budget when these monies went missing from HUD.
What was his role?

How would you describe HUD's traditional performance in preventing
money laundering in the US mortgage and homebuilding markets?

The
Missing Money – links to key articles and government
documents on the missing trillions

Question
#3: Why did you
resign from the bench?

You resigned at the same time that Hamilton's legal documents along
with an overview of your management of the Hamilton qui tam and
other litigation was launched on the Internet. Also at that time,
your role in the alleged falsification of an affadavit related to
the conviction of Edwin Paul Wilson attracted media attention (see
Ed
Wilson's Revenge, FTW 1/00). (This was well before October 2003,
when Wilson's conviction was vacated and the Department of Justice
announced an investigation into the matter. What if anything, did
the Hamilton litigation, and litigation related to the Wilson conviction,
have to do with your resignation from the bench?

This Memorandum
of Understanding between the CIA and DOJ was published as
part of the declassified two volume report by the CIA Inspector
General confirming the “Dark
Alliance” allegations regarding CIA complicit narcotics
trafficking into South Central Los Angeles.

Question
#2: Why did you
suppress Community Wizard?

In
early March 1998, in your capacity as US
Federal District Judge, you approved the court takeover of
Hamilton Securities office, during which Hamilton's
software tools and databases – including their Community Wizard
system – were destroyed and/or seized by the court, and related
decisions by you ensured that the Department of Justice was able
to seize monies owed to Hamilton. The databases, destroyed or removed
from the Internet until many years later, included the maps of high
defaults on HUD mortgages in areas targeted by alleged CIA narcotics
trafficking, including South Central LA.

For example, the
following map
was generated using Community Wizard,
a software system providing communities with important financial
information about their place:

While Hamilton was locked out of its offices and was overwhelmed
by managing the workload related to an effort by government investigators
to falsify "evidence"
while controlling and trashing Hamilton's
offices and systems, in hearings on Volume
1 on March 15th, 1998, CIA Inspector General Hitz disclosed
the existence of this secret Memorandum of Understanding between
the Bill Casey as CIA Director and then Reagan Attorney General
William French-Smith. On October 8th, 1998, the declassified version
of Volume
II was made public one hour after the House of
Representatives voted to conduct an impeachment inquiry on President
Clinton and just before House members were compelled to cease all
other activity to resolve the budget crisis. Subsequently, several
people involved in the negotiations died unexpectedly (reference
Snider
Quits, paragraph 5).

The narcotics trafficking
by CIA during the time in which you were CIA General Counsel
were further illuminated by the depositions of Tom and Desiree Ferdinand,
son-in-law and daughter of Col. Al Carone, formerly of the CIA,
Army and NYPD, filed that year in a lawsuit against the CIA that
were maintained under seal until the late 1990's. (D'Ferdinand deposition
by attorney Ray Kohlman - Part I, Part II, Part III, Part IV, PartV; Tom Ferdinand deposition by attorney Ray Kohlman
- Part I, Part II, Part III.)

Question
#3: What was your
role with the Mena, Arkansas Iran Contra operation and local HUD
agency?

The Sporkin years at the CIA were also illuminated by numerous
reports of arms and narcotics trafficking in Mena, Arkansas during
Iran Contra and related money laundering through the state housing
agency, the Arkansas Development Finance Agency. During this period,
Vice President George H. W. Bush was in charge of all US enforcement
and intelligence operations through the National Security Council,
Oliver North was at the NSC and President Bill Clinton was the Governor
of Arkansas, and Senator Hillary Clinton was a partner in a law
firm that served Arkansas Development Finance Authority, alleged
to have laundered the state share of the profits.

Question
#4: Is "Slimey
Affirm" a code name you used in an off shore account?

In his book Defrauding
America, Rodney Stich describes allegations regarding your
code name, "Slimey Affirm," for off shore accounts maintaind
in connection with Nugen Hand Bank. What has been your practice
of maintaining off shore accounts throughout your government and
judicial career?

Question #5: Do you shut down honest
businesses to protect government crime and narcotics trafficking?

The Hamilton Securities
maps of South Central LA were made by a start-up data servicing
company in a low income residential Washington, DC community --
Edgewood Technology Services. Was the bipartisan rejection of Hamilton
and Edgewood, and Catherine Austin Fitts' model of building community
databanks (such as Community Wizard) and venture capital related
to government dependence on narcotics trafficking and money laundering?

As Director of the SEC Enforcement Division

Question
#1: Are US enforcement
efforts designed to prevent or promote money laundering?

During your rise to prominence, the US leadership of global money
laundering has grown to an estimated $500 billion - $1 trillion
a year. Would you say that US enforcement efforts are designed to
prevent or promote "dirty money" flows?

Question
#2: Is National
Security Law used to fraudulently over-issue mortgage securities
to fund the "black budget"?

What are the criminal and civil violations involved if a government
agency, private corporation and or state housing agency were to
over-issue mortgage backed securities or housing bonds reflecting
more in financial capital than existed in actual mortgages or homes?
Could such violations be overridden by the National Security Act
of 1947 and the CIA Act of 1949, which make special provisions for
unusual financing arrangements to
fund the black budget?

Additional Background
Information

Judge Sporkin joined Weil,
Gotshal & Manges as a partner. Weil
Gotshal is considered one of the leading bankruptcy law firms in
the US. Weil Gotshal is the lead bankruptcy counsel to Enron, whose
financial managers have been indicted for money laundering.

Judge Stanley Sporkin (Ret.) is a Partner at Weil, Gotshal
& Manges residing in its Washington, D.C. office. Judge
Sporkin's practice consists of counseling parties in SEC,
Corporate Governance and Litigation Matters. Because of
his judicial background, he also acts as an arbitrator and
provides mediation services.

Judge Stanley Sporkin was born in Philadelphia
in 1932, attended Pennsylvania State University from 1949-1953
and received his law degree from Yale University in 1957.

He then went to the CIA from 1981-86 where
he as the General Counsel. In 1985, President Ronald Reagan
appointed him to the Federal Bench where he served as a
United States District Judge for the District of Columbia
for 14 years. Judge Sporkin is also a Certified Public Accountant.

In 1976 he received the National Civil Service League's
Special Achievement Award and in 1978, Judge Sporkin received
the Rockefeller Award for Public Service from the Woodrow
Wilson School of Public and International Affairs at Princeton
University. In 1979, he was the recipient of the President's
Award for Distinguished Federal Civilian Service, the highest
honor that can be granted to a member of the Federal career
service. During his service with the Central Intelligence
Agency, the Director of Central Intelligence conferred on
him the Distinguished Intelligence Medal. In 1990, he was
named an Alumni Fellow at the College of Business Administration,
The Pennsylvania State University. In 1994, he was presented
the William O. Douglas Award for Lifetime Achievement by
the Association of Securities and Exchange Commission Alumni
and honored by B’nai B’rith and in May 1996, he was presented
the H. Carl Moultrie Award for Judicial Excellence by the
Trial Lawyers of Washington, D.C. In June 2000, he was presented
with the prestigious Federal Bar Association's Tom C. Clark
Award. In October 2000, Judge Sporkin received the Judicial
Excellence Award from Judicial Watch

Judge Sporkin is the son of The Honorable Maurice W. Sporkin
(deceased), a long time Judge of the Court of Common Pleas,
Philadelphia, Pennsylvania, and Ethel Sporkin (deceased).
He is married to Judith Sally Imber (married September 30,
1955) and has three children: Elizabeth Michael Sporkin,
Daniel Paul Sporkin, and Thomas Abraham Sporkin; and two
grandchildren.

Judge Sporkin has served as an adjunct
professor at Antioch Law School, 1974-81, Howard University,
1971-, member of the executive committee, University of
California Securities Regulation Institute, 1977-

The Collected Works of Col. L. Fletcher Prouty, including, The
Secret Team: The CIA and Its Allies in Control of the United States
and the World, Col. L. Fletcher Prouty (Ret.) and Understanding
Special Operations And Their Impact on The Vietnam War Era - 1989
Interview with L. Fletcher Prouty Colonel USAF (Retired), by David
Ratcliffe, rat haus reality press, 1999. http://www.ratical.org/ratville/JFK/ST/
http://www.ratical.org/ratville/JFK/USO/
CD-Rom, available from http://www.prouty.org/cdrom.html at The
Col. L. Fletcher Prouty Reference Site

Dark Alliance, Gary Webb. New York: St. Martin's Press, 1998.(*)

Dope, Inc.: Britain's Opium War Against the United States, Konstandinos
Kalimtgis, 1978